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RIM takes another hit as Yahoo! drops Blackberry phone
Research In Motion suffers another hit as Yahoo! announces it will buy its employees any smartphone but the Blackberry.
Research In Motion (RIM) (TSE:RIM) (NASDAQ:RIMM) suffered another blow Monday, as reports stated Yahoo! (NASDAQ:YHOO) will give its employees a new smartphone, but the Blackberry is not among the choices given.
According to a Financial Post report, Yahoo CEO Marissa Mayer recently emailed all of Yahoo’s full time and part time employees in the U.S., promising them a new Apple (NASDAQ:AAPL), Samsung, Nokia (NYSE:NOK), or HTC (TPE:2498) smartphone, through a program called “Yahoo! Smart Phones, Smart Fun!”
Through the program, Yahoo employees will have a choice of phones: iPhone 5, Samsung Galaxy S3, HTC One X, HTC EVO 4G LTE, or Nokia Lumia 920. Yahoo is also reportedly going to pay its employees data and phone bills and will discontinue IT support for Blackberry phones.
According to an internal Yahoo! memo published by Business Insider, the program is expected to cost the company millions, but the idea behind it is for Yahoo! employees to use the phones that its users are using.
"A few weeks ago, we said that we would look into smartphone penetration rates globally and take those rates into account when deciding on corporate phones,” states the memo.
“Ideally, we'd like our employees to have devices similar to our users, so we can think and work as the majority of our users do.”
Shares of RIM fell 3.81 per cent as at about 1:45 p.m. ET on Monday, trading at $7.06.
Last month, press reports said that RIM could be looking to offload cloud services company NewBay as well as shed other minor assets as part of a strategic review process.
The company’s spokespeople declined to comment on the report.
The Waterloo, Ontario-based company was once a pioneer in the smartphone industry but has lost out in recent years to more-advanced devices such the iPhone and devices based on Google's Android software.
RIM acquired NewBay, which provides photo, video, and social networking tools for smartphones and computers, in October 2011 for around $100 million.
The acquisition was a huge part of the former RIM leadership's plan to alter course and boost service revenue.
Earlier this year RIM's co-chief executives Mike Lazaridis and Jim Balsillie resigned, ushering in former Siemens executive Thorsten Heins.
Heins has initiated a strategic review process and is focused on delivering a new line-up of devices that run on RIM's new BB10 operating system, in the first-quarter of 2013.
Smartphones running the new BlackBerry 10 operating system are critical to RIM's survival but those phones will only be available from early 2013, possibly too late to save the company as more and more consumers abandon BlackBerrys for other devices.
Since taking charge earlier this year, Heins has retained RBC Capital Markets and JPMorgan to explore options.
The company's share price has fallen more than 60 per cent over the course of the last year, as RIM has continued to lose market share.
RIM was once Canada's most valuable company with a market value of more than C$80 billion in June 2008, but the stock has plummeted since, from over $140 per share to around $7.
